Staar Surgical Company · NASDAQ:STAA
Staar Surgical — Investor Presentation (December 2013)
30 slides from Staar Surgical's investor presentation, Dec 2, 2013
Slide 1: Visian ICL, Fastest Growing Refractive Technology in the World
1 Visian ICL, Fastest Growing Refractive Technology in the World December 2013 NASDAQ : STAA
Slide 2: Forward-looking statements
All statements in this press release that are not statements of historical fact are forward - looking statements, including statem ents about any of the following: any projections of earnings, revenue, sales, profit margins, cash, effective tax rate or any other financial items ; t he plans, strateg
Slide 3: Generating Strong Current and Future Growth
• Two Large Market Opportunities • Sustainable Competitive Advantages • Rapid Cadence of New Products • Increasing IP Position with New Technologies • Strong Balance Sheet Getting Stronger • 2014 Operating Leverage Enhances Profitability 3 Generating Strong Current and Future Growth
Slide 4: Focused on Vision
Focused on Vision 4 Cataract IOL Refractive ICL 61.2% YTD Q3 Revenue 55% in 2012 32.9% YTD Q3 Revenue 41% 2012 Only Intraocular Lenses Placed within the Eye
Slide 5: How to Look at Our Growth
• Continued ICL Market Penetrations – Double Digit Revenue Growth – 85 % Gross Margin – New Products (CentraFLOW, Preloaded, and V6) • Targeted IOL Profitable Growth – Single Digit R evenue Growth – 60 %+ Gross Margin Target – New Products (nanoFLEX Toric and KS - SP) • Project Comet Benefits begin
Slide 6: STAAR's Value Driver: The Visian ICL
STAAR’s Value Driver • $3B Addressable Market • Currently about 2% Market Share & Growing • $32.6M Revenue 9 Month YTD – $80M End Customer Sales Annualized • Sales Growth Rate 24% YTD – 85% Gross Margin – New Product Launches (CentraFLOW & Preloaded) • 10% Share in Focused Markets Yields Nearly $300
Slide 7: Visian ICL and TICL Premium Product
• Implantable Collamer ® Lens Better Known as the “Implantable Contact Lens” • Made f rom a Proprietary Material Called Collamer • Corrects Myopia (Nearsightedness/Inability to See Far) • Toric ICL (TICL TM ) Version Corrects Both Myopia and Astigmatism (Blurred Vision D ue to Inability to Focus)* 7
Slide 8: Competitive Landscape
Competitive Landscape Lens Based Segment Changing • STAAR Is the Market Leader – >65% Unit & Dollar Market Share – Only Posterior Lens Approach • Other Players (Anterior Lens) – Abbott - AMO (Not Competitive) – Novartis - Alcon ( Removed from Key Markets ) – Ophtec (Sells on Price) • The Big Guys Ar
Slide 9: Advantages of Visian ICL Over LASIK
9 ICL • Small Micro Incision • Adds Lens into the Eye • Permanent but Removable • No Induced Dry Eye • Future Options Preserved LASIK • Incision over 1 Inch - Long • Burns Material Away • Cannot Be Reversed • Potential Dry Eye • May Reduce Future Options Advantages of Visian ICL Over LASIK 8 - 12% N
Slide 10: Why LASIK Under Pressure?
Why LASIK Under Pressure? Good Procedure for Some, but Not All • Limitations of LASIK – Contraindications Exclude Approximately 8% to 12%: • Dry Eye • Thin Cornea • Large Pupils • Cornea Disease • High Level of Myopia and/or Astigmatism • When LASIK Patients Reach Cataract Age – “Patients who’ve had
Slide 11: Visian ICL with CentraFLOW (V4c ICL)
Visian ICL with CentraFLOW™ (V4c ICL) • CentraFLOW™ Technology Assists the Natural Aqueous Flow within the Eye Utilizing the KS - AquaPORT™ • Eliminates a Procedure and Visit - (LASIK - like) • Same Day ICL Surgery now Possible • Economics Better for t he Surgeon • 10% Price Premium • 35,000 Implant
Slide 12: Targeted ICL Markets
Targeted ICL Markets 12 Market 2012 Total Ref. Proc. 2012 Ref. Proc. ∆ 2012 ICL Proc. ∆ ICL Share Ref. Proc. 2012 ICL Gain 2013 ICL Gain China 830,000 (21%) +37% 1.2% x +32% U.S. 623,700 Flat +2% 1.0% x +13% Japan 254,000 (22%) 102% .9% x +7% Latin Am 227,260 +4% (6%) 1.2% +33% India 148,550 +5% +26
Slide 13: Q3 YTD Unit Results 2012-13: The CentraFLOW Impact
Korea China India U.S. M East Spain Lat Amer Japan Germany France Italy U.K. Q3 YTD 12 Q3 YTD 13 Q3 YTD Unit Results 2012 - 13 “The CentraFLOW Impact” Visian ICL Units Increase in All 12 Target Markets 9 Month YTD ICL Results Unit Growth in Key Markets (Gaining Share Globally) +7% +32% +17% +13% +22
Slide 14: Market Introduction of the V5 Preloaded ICL
Market Introduction of the V5 Preloaded ICL Rapid Cadence of New Products 14 • October Market Introduction at ESCRS • V5 - Preloaded ICL with Enhanced Optics – Saves Procedure Time – Learning Curve Shortened – More Consistent Delivery • Enhanced Optic Design to Increase U seful O ptical Z one to Ben
Slide 15: V6 ICL Next in Line (V6a ICL)
V6 ICL Next in Line (V6a ICL) Rapid Cadence of New Products • Differentiates ICL for Myopic P atients N earing Age 40 Who Will Need Near & Intermediate Adds – Approximately 30% of Population Myopic • Goal To Add Near - Vision Enhancement Capability – Treats the Early Onset and Progression of Presbyo
Slide 16: V6 ICL Next in Line (V6b ICL)
V6 ICL Next in Line (V6b ICL) Rapid Cadence of New Products • Targets New Market: Presbyopic Patients A ge 40’s and Above – Solution to the Need for a Permanent N ear and Intermediate V ision E nhancement – 100% of Population over Approximately A ge 50 Affected (Estimated 1.8 Billion Are Challenged
Slide 17: Expanded Market Opportunities: Regulatory Submissions
Expanded Market Opportunities Regulatory Submissions • FDA Toric ICL Submission – Been Told by FDA to Prepare for a Panel Meeting Scheduled February 14 • CentraFLOW Submissions – Recent Approvals in Korea, India and Argentina – China Submission - Approval B elieved on Track for Q2 2014 – Japan Submi
Slide 18: Consumer Education and Awareness
Consumer Education and Awareness • Launched N ew W ebsite, www.staarmd.com, to Assist S urgeons with Practice Development Efforts with the Visian ICL • Patient Leads G enerated from ‘Doc Finder’ Increasing – 68% Followed up by Surgeon’s Practice for Consultations – From Those Consultations: 62% Rece
Slide 19: Consumer Education and Awareness: Social Media Marketing
• 240 Screens for a three month period throughout Korea. 19 Social Media Marketing (Movie Theater Ads in Korea) Consumer Education and Awareness
Slide 20: The ICL Technology Era Beginning?
The ICL Technology Era Beginning? 20 • RK: Started in 1978, Peaked in 1994 • PRK: Started in 1984, Peaked in 2006 • LASIK: Started in 1989, has LASIK Peaked?? – Big Guys Heavily Invested – LASIK Procedures Losing Share in Major Markets • Visian ICL: – Over 375,000 ICLs Implanted World W ide – Gainin
Slide 21: Cataract IOL: Large & Growing Market, Tough Competitive Landscape
• 21.9M IOLs Implanted in 2013 ( 26.1M 2018) • The Big Three Hold ≈70% Market Share – Novartis (Alcon), Abbott (AMO), Valeant (B&L) • STAAR Strategy – Focused on Only the Higher Margin Premium IOLs – Focused Only in Markets that Generate a Fair Profit Large & Growing Market Tough Competitive Landsca
Slide 22: New IOL Products: Growth Despite Supply and Currency Headwinds
• 9 Month YTD Sales $17.5M, 3% Growth in CC – (9%) USD YoY , >50% sales in Japan • Acceptance of the KS - IOLs Has Increased • Supply from 3 rd Party H as L imited O ur G rowth: – Approximately $800k in Backorders from European Customers at End of Q3 – Reduced Accounts with Consignments in Japan – S
Slide 23: YTD Key Financial Results
YTD Key Financial Results 23 Measure YTD 2013 YTD 2012 Change Revenue $53,271 $47,316 +$5,955/+13% Gross Profit $37,322 $33,122 +$4,210/+13% Gross Profit Margin 70.1% 70.0% +10bps Operating Expenses $35,381 $33,098 +$2,283/+7% Income Before Taxes $ 2,162 $ 430 +$1,732 Income Taxes $ 888 $ 779 $ (109
Slide 24: YTD Key Financial Results Non-GAAP Measures
YTD Key Financial Results Non - GAAP Measures First Nine Months ($000’s) 24 Measure YTD 2013 YTD 2012 GAAP Net Income (loss) $1,274 $(349) Mfg. Consolidation Expenses $2,004 $1,980 Spain Distribution Transition Cost $442 $569 Foreign Currency Impact $38 $(9) Adjustment of Warrant Value $ (27) $(217)
Slide 25: STAAR Balance Sheet Strong and Improving
STAAR Balance Sheet Strong and Improving • Profitable and Generating Cash – $23.4M in Cash as of end of Q3 – $3.1M Cash Generated from Operations during Q3 • Working L ine of C redit in Japan at 1.4% Interest Rate • $122M in NOLs (Worth $ 1.00/share) • 39.3M Diluted Shares Outstanding – 1.4M Warrant
Slide 26: Manufacturing Consolidation Project Comet
• Consolidate Four Manufacturing Operations (Japan , U.S., Switzerland) to One E xisting U.S. Facility in Monrovia • 3 + Years to Complete at a Cost of $6.2M – Spent $1.1M in 2011/$2.6M in 2012 – Spend $ 2.0M YTD 2013, $260k Planned Q4 – Approximately $240k Planned for 2014 to Complete • Complete Ma
Slide 27: Post Comet Operating Model Potential
27 Metric 2013 Analyst Ests * If $90M If $100M Revenue $ 72.4 $90.0 $100.0 Gross Margin % 70.4% 78.5% 80% Gross Margin $ $ 50.8 $ 70.6 $ 80.0 Operating Exps. $ 47.2 $ 48.5 $ 50.0 Operating Inc. $ $ 3.5 $ 22.1 $ 30.0 Operating Inc. % 4.8% 25% 30% Net Income $ $ 2.1 $ 20.0 $ 27.0 Net Income % 2.8% 22%
Slide 28: Solid Start to 2013
Solid Start to 2013 9 Month YTD Growth • Revenue Growth of 13% / 18% in Constant Currency – Visian ICL Growth of 24% – IOL Growth of 3% in Constant Currency (USD 9% Decline) • Gross Margin 70.1%, 72.7 % GM Without N egative I mpacts – Negative Impact from Yen V aluation and Low Margin Injectors 260
Slide 29: Upcoming STAAR Catalysts: Key Drivers for Growth
• Expanded ICL with CentraFLOW approvals to APAC markets: – Korea, India, China & Japan • Commercialization of Preloaded ICL in EU • Scheduled FDA Panel Meeting for TICL on February 14 • Contribution from Consolidation Benefits • Introduction of V6a to EU late 14/early 15 29 Key Drivers for Growth U
Slide 30: Visian ICL, Fastest Growing Refractive Technology in the World
30 Visian ICL, Fastest Growing Refractive Technology in the World December 2013 NASDAQ : STAA
Staar Surgical — Investor Presentation (December 2013) on 6ix